Representatives of two privately owned Carson City golf courses told officials Thursday they believe the city-owned Eagle Valley Golf Course has an unfair competitive edge in the golf market.
Mark Turner, vice president of Silver Oak Golf Course, said "the competitive market is skewed with subsidies" to which he, as a taxpayer, is obliged to contribute.
"We don't have the ability to have someone else pay our infrastructure costs," Turner said. "In order to create an environment that allows private businesses to succeed, there needs to be a level playing field."
Dwight Millard, owner of Empire Ranch Golf Course, called the city's course "a very formidable competition."
Carson City Finance Director Nick Providenti explained that the city owns all the assets of the profitable golf course, and that it hired Carson City Municipal Golf Corp. in 1997 to manage it. The lease was renewed for five years in 2002.
The course was created decades ago to fill a recreational need in Carson City so that the average resident could afford to play golf. Years prior to that, the area that is now Mills Park was a golf course.
The city also saves money by not having to store its treated effluent year-around in a holding facility. It uses the treated effluent throughout most of the year to water the golf course and city parks, and it sells effluent to other entities such as the other two privately owned courses.
"It would cost us a lot if we had to store treated effluent," said Mayor Bob Crowell.
Former Carson City mayor Marv Teixeira, an avid proponent of the city's course, said he has been involved with it since it opened in 1977. He explained some of the
history.
"In 1984 or 1985, the city decided to build the West Course with revenue bonds sold by the city. It was built, but not correctly," Teixeira said.
A grand jury was convened, on which he served, to address problems with the course, as well as other city issues.
"We told the supervisors in late 1987 that the city put Eagle Valley in a hole," Teixeira said. "The city was aware it was upside down on the bond payment from the get-go."
He said when took office as mayor in 1989, every other meeting was about a golf course issue.
"Then came Dayton Valley and Empire (golf courses) and our director of golf Tom Duncan went to Dayton Valley and took (people) with him. We were going down, so I recommended that we go to non-profit, and it worked," he said.
Jim Kepler, a PGA Pro who acts as general manager and director of golf at Eagle Valley, said the course was paying the city in big chunks to begin with.
"The first year, we paid $600,000, the second year $450,000, and then it dropped to $250,000, then $200,000. We needed some relief so we refinanced to $120,000 a year. We intend to pay it off by the end of June," Kepler said. "We did not miss payments, but we were behind a bit."
But Millard said in a letter to the board of supervisors that certain actions have created an unfair advantage.
"Starting in 2009, when Eagle Valley requested that their annual payment be deferred and future payments be reduced, I felt the level playing field begin to diminish, and city's involvement with Eagle Valley gave that course an undue advantage over the other area courses," he said.
"For the amount of the bond payment that the city is paying, the $200,000 a year lease payment is correct and should be continued. The forgiveness of the payment in 2009, and added to the end, does not make any sense at all," Millard said.
"Perhaps more important than the annual payment is the unknown costs of the city involvement in helping to maintain the effluent system on the golf course property, the landlord improvements made with city funds, (and) the purchase of equipment and supplies through city departments utilizing the city's buying power or sales tax exemption. The real costs of this operation may not even be identifiable," he said.
Kepler said he believes Eagle Valley is competing fairly.
"Do we have a better park? A better price? Yes. In some ways we have a better product. It's not unfair. It's a different product," Kepler said.
Supervisor John McKenna asked what Millard and Turner would like to see
happen.
"I'm not telling you to close that golf course. There are other things that could be done with that property. It wouldn't hurt our feelings to see Eagle Valley converted to another use, but you're probably not going to do that," Turner said.
He offered up a suggestion that Silver Oak and Empire be offered a property tax abatement or rebate or effluent assistance.
"We'd like to see something within the year," Turner added.
Millard agreed.
"The old argument of providing affordable golf for locals is just not valid anymore," he said.
"We must also review and analyze those programs, such as golf subsidies, and determine if they in fact contribute to or enhance the quality of life in Carson city beyond what the private sector is providing," Millard said.
